Bad budget news, and a governor-elect who has made it clear cutting state spending is a priority, means local jurisdictions and mass transportation advocates are watching closely for signs of how the new administration will proceed with spending.
The state is facing a combined budget deficit of more than $1 billion for the current budget year and fiscal year 2016, but cities and counties want to see the return of highway user revenues they depend on for road projects. Groups, such as the Maryland Municipal League and the Maryland Association of Counties say Republican Gov.-elect Larry Hogan made it clear he supported restoring those monies during his campaign.
But they also say the state’s budget situation may hamper what Hogan can do to restore funds. A new “lockbox” on the state’s transportation fund approved by voters this fall limits the ability of governors to transfer funds elsewhere. The governor is now required to declare a “financial emergency” and pass a measure by three-fifths of each house of the General Assembly before transportation funds could be spent elsewhere.
In remarks earlier this month, Hogan detailed what he described as dire fiscal news. But he also told reporters he has no intention of raising taxes or transferring money earmarked for transportation and the environment.
During the campaign, Hogan made promises to the Maryland Municipal League and the Maryland Association of Counties that he would restore their traditional share of money used for road construction and repair in his first budget.
“I think at every opportunity [Hogan] has expressed really sincere intent do the best that he can. So, I know that’s something that will be a priority for him,” said Candace Donoho, the Maryland Municipal League’s director of government relations. “But having said that he has received some pretty unhappy surprises.”
In recent years Highway User Funds have been used to help balance the budget, which resulted in funds for 156 municipalities being slashed from about $45 million to as low as $1.6 million two years ago. Although the past two years municipalities received one-time grants to help restore some funding.
“In the grand scheme of things it’s not a big amount of money when you’re looking at the state budget. Of course, keeping in mind that we’re headed toward a $1 billion deficit it does make it a player in the deficit itself,” Donoho said. “We’ve always said we can do a lot with a little bit of money and we can stretch a dollar like nobody else in government.”
Andrea Mansfield, legislative director at the Maryland Association of Counties, said that the restoration of local transportation funding remains the top priority, as it has the last few years. She said that despite the bad news regarding the state budget the organization still remains optimistic there will be an increase in funding. For the current fiscal year the counties received $10 million from the transportation fund set aside for pothole repairs. But they did not receive one-time grant awards like the municipalities.
“Since winning the election, we know budgets are not exactly what we thought they’d be, but [Hogan] still indicates some level of commitment to that, so we’re still hoping that we will see something when the budget is introduced in January,” Mansfield said
Baltimore Mayor Stephanie Rawlings-Blake, whose jurisdiction receives the largest portion of Highway User Revenues because there are so few state maintained roads in the city, also said that it will be a priority for the city to have user funds restored. She said those reductions have been a major blow to the city’s ability to improve its streets.
“This year we had the 26th Street collapse, we’ve had multiple water main breaks, our infrastructure needs are very clear. So when you take a look at the transportation funds that we have it’s important that we keep that funding steady,” Rawlings-Blake said. “We’ve taken a significant hit — I think it’s something like 80 percent or more — over the past, I think 10 years, reduction in Highway User Revenue.”
Roads vs. Rail
The fate of the Red Line and Purple Line light rail projects hang in the balance as supporters try to emphasize the economic development opportunities presented by the proposed routes.
Hogan has previously said he prefers to spend revenues from the state’s gas tax on building roads rather than building rail routes. He has called the projects too expensive and said they would drain all the money out of the state’s transportation trust fund.
Since the election, Hogan has declined to pronounce either project dead and has said his administration will review both proposed rail lines.
Don Fry, president and CEO of the Greater Baltimore Committee, said his organization’s top transportation priority remains the Red Line. He said the committee recently sent a letter to Hogan, on behalf of the group’s board of directors, emphasizing their support for the $2.9 billion route connecting western Baltimore County and East Baltimore. The organization’s board of directors includes Baltimore Orioles owner Peter G. Angelos, Exelon Corp. Executive Chairman Mayo A. Shattuck III and Under Armour CEO Kevin Plank.
Fry described the Red Line as a “jobs line” that will provide rail access to 90,000 residents within a half-mile of the stops. Furthermore, he said, there are about 184,000 jobs currently within that half-mile radius, which represents about 65 percent of the entire employment in the city.
If the Red Line is built he said that number is anticipated to raise to 200,000 jobs within a half-mile of the stops.
“The Red Line has been our top economic growth and transportation priority for over a year, and Baltimore has put us in a great position to have the Red Line — the first major transit project in this region for well over a decade,” Fry said. “This is a once in a lifetime opportunity for Baltimore.”
Rawlings-Blake said she recently had a “very productive” conversation with Hogan and that he understands the importance of the Red Line to the future of the state. She said the governor-elect has made it clear that growing business in the state is a priority and that pursuing the Red Line is one way to make that happen.
“It’s very clear that unless you want to put an expiration on your growth strategy you have to plan for the type of transportation infrastructure like the Red Line represents. He gets that, but it doesn’t change the fiscal realities of the state,” she said. “So there’s still a lot of talking going on.”
Business leaders weigh in
Supporters of the $2.45 billion Purple Line, which would connect Bethesda and New Carrollton, are also emphasizing business leaders’ backing by sending letters of support from the Prince Georges and Montgomery County chambers of commerce, as well as a plea from 24 members of the area’s real estate and development community.
George Leventhal, president of the Montgomery County Council, pointed to comments by Hogan that when he considers a project or a law he will weigh whether it makes it easier for families and small business to stay or move to Maryland. The Purple Line. Leventhal said, achieves those goals.
If the light rail route isn’t built, economically stagnant areas will remain that way, he said.
“I think there’s a very solid and substantive argument for proceeding with the project. I know that case is being made, very rationally in a fact-based way to Mr. Hogan, and I know that he’s weighing those facts,” Leventhal said. “Beyond that I don’t think he’s determined precisely in which direction he will go and I think he’s getting a lot of input right now.”
Ralph Bennett, president of the board of directors for advocacy group Purple Line Now!, said his group has to assume the governor and his Cabinet will see the intelligence of building the line because the Washington, D.C., suburbs cannot handle any more traffic.
“The project is a conservative dream for infrastructure improvement. A third of it’s being paid for by the taxpayers of Maryland and the other two-thirds are being paid for — half by private capital and half by the federal government,” Bennett said. “So it’s a massive investment of enormous importance, which is only one-third paid by the people who will use it.”
ABOUT THIS SERIES
This is the sixth in a weekly series of stories by The Daily Record highlighting issues in the upcoming General Assembly session in preparation for the Annapolis Summit, a two-hour program on Jan. 30 featuring the state’s top political leaders. All of The Daily Record stories in the series will be available on our website, TheDailyRecord.com
The summit will be hosted by Marc Steiner, whose “The Marc Steiner Show” on WEAA 88.9 FM at 10 a.m. weekdays is broadcasting a weekly feature on the same subjects as the newspaper series. The show also will be posted at steinershow.org.